Google-Yahoo Deal Delayed

    October 22, 2008
    WebProNews Staff

A report surfaced yesterday saying the Googel-Yahoo ad deal was effectively toast. That was according to an unnamed lawyer present at a meeting between the Dept. of Justice and attorneys for the companies. But the companies’ official public response is that the (waiting) game is still on.

“Nothing good came of it,” said the lawyer about the meeting, leading to assertions that the deal was kaput at (subscription service) and Silicon Alley Insider’s Henry Blodget. The report also noted a possible preliminary injunction to prevent the deal from going forward. The proposition made sense considering Google came right out and said they may go ahead despite government objection.

However, in statements from both Google and Yahoo, the companies remained confident, and that any delay in plans is voluntary while they work things out with the DOJ, and not because of any injunction. Both said they believed the deal would actually strengthen Yahoo’s competitive position in the market.

Who to believe? An anonymous lawyer or corporate spokespersons trying to dispel any whispers their respective company’s plans are soon to be thwarted?

Tough call, I know.

It’s very easy to imagine they’re both right: One threatens injunction, the others agree to a voluntary delay to avoid that. It’s hard to imagine, too, how much more Yahoo’s stock price would be punished if the Google deal doesn’t go through. Can you say sub $10 Yahoo? Can you say definite Microsoft buyout?

Delaying any action by the government, even government-imposed delay, for another quarter would be both companies’ interest, for sure. It gives Yahoo three months to get their stuff together—ahem, to allow recent cutbacks to affect the bottom line—and it gives Google enough time to see if friendlier parties * cough * Vint Cerf * cough * ride the executive post-election coattails. Whoever is Tech Czar will have definite influence.

Could be a good gamble, unless Obama chooses (and he accepts) Steve Ballmer for the position. Can you say sitting duck?